One troubling matter stands out among the accolades for Robert Zoëllick and his tenure at the World Bank – troubling for both the prospects and practice of development. Almost 50 percent of the people in sub-Saharan Africa today find themselves with an income above $1.25 a day, observers note. This ambiguous circumstance still prevails some 70 years after the founding of the World Bank.
McKinsey & Co. argues that “Africa’s collective long-term prospects are strong” while The Economist says “the continent’s impressive growth looks likely to continue.” Wonderful, but the African Development Bank observes that, in 50 years, one-third of Africa’s population will still be living with an income below $1.25 a day and another 10 percent living between $1.25 and $2 a day.
The World Bank differentiates Africa from other developing regions by its overall dependence on agriculture for both economic growth and employment. Development in other regions is characterized by a progressive shift in productive structure – from agriculture to industry and then services – a core measure of progress in development studies since the founding of the World Bank. Africa alone stands apart.
The historical record and statistical evidence clearly confirm structural change as a powerful pathway toward development. The well-known underlying dynamics of the shift from one productive structure to another is an increase in agricultural productivity that allows labor and capital transfers toward other activities. This process is generally accompanied by a related shift in spatial organization from scattered activities (typically agriculture) to more concentrated ones (typically industry) together with growing urbanization – a process that characterizes both industrialized and modernizing economies.
African leadership has clearly identified this process as a key to the continent’s development, with heads of state urging “a paradigm shift from managing poverty to economic transformation for Africa” at the 14th African Union Summit in 2010. In the same vein, the New Partnership for Africa’s Development, or NEPAD, is seeking to spur that kind of transformation through its innovative Rural Futures initiative in 2011.
The case for transformation is buttressed by the fact that the population of sub-Saharan Africa will double by 2050 – the yearly cohorts of additional active population estimated at 10 million people today will likely reach 18 million by 2030. Agriculture, particularly smallholder agriculture, is unlikely to be able to absorb these numbers while at the same time seeking to increase labor productivity.
The best way to deal with this structural challenge and transformation agenda is to re-energize the development discourse and bring forward development strategies in order to set a framework for action and articulate the necessary public policies. But while African leadership and institutions point to this direction, the World Bank and international development community appear to have lost confidence in both the development discourse and strategies. How so?
First, the market has overtaken the role of the state in development discourse and practice. Where states once played an active (and in many instances successful) role in stimulating and even directing economic growth and development, that approach lost out to a neo-liberal agenda and the “Washington Consensus” in the last 25 years. A disinclination to embrace a development process that engages the state in the direction and promotion of the economy continues to characterize the thinking of the World Bank and international development community. Nevertheless, new practices and theories of development are emerging, as reflected in a recent joint issues paper of the African Union Commission and U.N. Economic Commission for Africa titled “Governing Development in Africa: The Role of the State in Economic Transformation.”
Second, a series of important problems (e.g. agriculture, health, education, the environment, climate change) has come to dominate both the development discourse and practice. This is partly attributable to the emphasis on targets and results (such as the Millennium Development Goals, for example), partly because of the interests and influence of a self-interested development community and industry. There is also the fact that the discourse is increasingly framed as one about aid and assistance, which confuses everyone, including the World Bank itself, on the actual mission. In any event, the development discourse today is constricted by its emphasis on means, hindering the consideration of broader and more holistic development processes and goals.
Third, agriculture itself has become the focus of and a substitute for both the development discourse and practice. While it is acknowledged that an increase in agricultural productivity is key to structural change and the desired economic transition, it is equally likely that the transition will not happen automatically. Attention to economic activity off-farm is essential. And while there is an opportunity for smallholder agriculture in areas close to urban centers, it is not the formula for a modern, commercial agricultural sector. Increases in agricultural productivity will inevitably lead to labor displacement, underscoring the argument for public policies and strategies that can create off-farm employment and facilitate the shift in productive structure toward industry and services, which, in turn, will accelerate economic growth and expand employment opportunities. It also the fact that the failure to produce off-farm employment is already pushing agriculture increasingly onto lands ill-suited for successful cultivation, contributing to an accelerating degradation of the natural environment and deforestation.
What lessons can we glean from all of this?
The following represent personal views on a prospective development discourse and practice for Africa. In fact, this is a discourse that needs to be undertaken by the full range of development practitioners recognizing the rigidity and polarity of the current circumstance:
Re-energize the development discourse, with particular emphasis on the transformation of productive capabilities and structure. This is not intended to discount issues related to human well-being, poverty reduction, the environment or sustainability rather to reintroduce the discipline of development economics and position the transformation of the productive structure at the heart of the development discourse.
Give much greater attention to industrial/urban and technology/innovation policies and strategies. These undoubtedly have merit in their own right, but, also, as they relate to NEPAD’s Comprehensive Africa Agriculture Development Program, the World Bank’s 2008 Agriculture for Development Action Plan and the efforts of the development community to support enterprise growth.
Respect the approach and thinking of development institutions and strategies across Africa as they coalesce around new practices and theories of development. This would be in keeping with the principles of the Paris Declaration on Aid Effectiveness and Accra Agenda for Action and in line with the promotion of greater openness and respect for the innovative approaches to state engagement with emerging economies across the developing world.
Explore the implications of globalization and liberalization. These play into a more contemporary understanding of comparative and competitive advantage, where returns in the new global economy favor capital and technology (an external advantage) over land and labor (a local advantage). This inquiry possibly suggests a greater tolerance for state action and autonomy in the realms of investment and trade.
Promote local and national development through the institutional and productive transformation of regions. This implies a more territorial approach to what is traditionally thought of as rural development. In this regard, NEPAD’s Rural Futures initiative may be the appropriate vehicle for advancing both the discourse and practice of a transformative approach to development in Africa. This also recognizes that the prospects for initiatives like Green Economy are dependent on transformative platforms for success.